Analyst firm: Broadband growth key for BSkyB

According to the latest research from Strategy Analytics – Service Provider Quarterly Recap and Guidance: BSkyB (BSY): CYQ1’12 – BSkyB followed up on a strong CYQ4’11 by adding an impressive 212,000 broadband subscribers in the first quarter of 2012. At the same time, the company added only 15,000 new pay-TV subscribers. This marks a new low in pay-TV subscriber additions where back-to-back quarters represent the slowest pay-TV growth in BSkyB history. In total, BSkyB now has more than 10.2 million pay-TV subscribers and 3.8 million broadband subscribers.

Strategy Analytics forecasts growth of 90,000 additional pay-TV subscribers and 425,000 additional broadband subscribers by the end of 2012. The firm has benefited from a growing number of subscribers – now the highest in the UK – that bundle services, leading to increasing average revenue per user (ARPU) and strong financial performance. Broadband growth will remain a key foundation of BSkyB’s new multi-product, multi-platform strategy and is crucial to the long-term success of the company.

“Many of the company’s new video products, such as Now TV, rely on broadband for delivery. BSkyB is thus banking on the idea that consumers will choose its broadband service to provide this connectivity,” said Jason Blackwell, Director, Service Provider Strategies (SPS) at Strategy Analytics.

According to Richard Fontes, Analyst in the Service Provider Strategies group, the upcoming ‘Summer of Sport’ will provide an opportunity for broadband and pay-TV vendors to gain mind-share among consumers. “In addition, the Olympic games and European soccer championship should help drive demand for broadband and pay-TV services, contributing to the growth in our forecast.”